4QFY2013 Result Update | Footwear

May 15, 2013

Relaxo Footwear
Financial Performance
Y/E March (` cr) Total Income EBITDA EBITDA margin (%) Reported PAT
Source: Company, Angel Research

BUY
CMP Target Price
% chg (yoy) 20.6 (3.1) (269)bp (28.2) 3QFY2013 223 19 8.4 6 % chg (qoq) 30.7 71.3 262bp 122.2

`605 `791
12 Months

4QFY2013 291 32 11.0 14

4QFY2012 242 33 13.7 19

Investment Period
Stock Info Sector Market Cap (` cr) Beta Net debt (` cr) 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Footwear 727 0.4 161 917 / 354 2,111 5 18,817 5,724 RLXO.BO RLXF IN

Relaxo reported mixed set of numbers for 4QFY2013. The revenue for the quarter grew considerably by 20.6% yoy and stood at `291cr, higher than our expectation of `275cr. However, on the operating margin front the company witnessed a contraction of 269bp on yoy basis and came in at 11.0% against out estimate of 11.8%, mainly due to the higher other expenses. Tax for the quarter stood at `8cr (38.1% of PBT). Subsequently, the profit for the quarter declined by 28.3% yoy and stood at `14cr, 27.7% lower than our estimate of `19cr. Store expansion and brand revamp to drive volume: Relaxo has aggressive retail expansion plans to open 25-30 retail stores every year to expand its direct reach and brand visibility. In FY2013, the company added 27 retail outlets, which has taken the total retail outlet count to 168 at the year end. We expect that this expansion of retail outlets along with the leading celebrity endorsement of the brands will help the company in expanding its reach as well as strengthening its brand image which will eventually result in top-line addition. Outlook and valuation: We expect Relaxo to post a revenue CAGR of 15.2% over FY2013-15E to `1,333cr with an operating margin of 11.4% in FY2015E. The PAT is expected to grow at a CAGR of 27.7% to `73cr for the same period. The stock has corrected ~25% since the start of this year and at the current market price, it is trading at attractive valuation of 9.9x FY2015E earnings. We maintain our Buy recommendation on the stock with a revised target price of `791, based on a target PE of 13x for FY2015E.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 75.0 16.1 1.5 7.5

Abs.(%) Sensex Relaxo

3m 3.8 (9.1)

1yr 23.8 68.1

3yr 20.1 95.8

Key financials
Y/E March (` cr) Net sales % chg Net profit % chg EBITDA margin (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research FY2011 FY2012 FY2013 FY2014E FY2015E

686 23.9 27 (28.8) 9.6 22.4 27.0 5.4 22.0 14.3 1.3 13.3

860 25.4 40 48.7 10.5 33.3 18.2 4.2 26.0 19.5 1.0 9.7

1,005 16.8 45 12.2 10.4 37.3 16.2 3.4 23.2 17.6 0.9 8.8

1,146 14.1 55 22.9 10.9 45.9 13.2 2.8 23.0 19.6 0.8 7.3

1,333 16.3 73 32.7 11.4 60.9 9.9 2.2 24.6 22.5 0.7 5.9

Tejashwini Kumari
30940000 ext: 6856 tejashwini.kumari@angelbroking.com

Please refer to important disclosures at the end of this report

4QFY2013 Result Update | Relaxo Footwear

Exhibit 1: 4QFY2012 performance

Y/E March (` cr) Net Sales Net raw material (% of Sales) Staff Costs (% of Sales) Other Expenses (% of Sales) Total Expenditure EBITDA EBITDA margin (%) Interest Depreciation Other Income PBT (% of Sales) Tax (% of PBT) Reported PAT PATM Equity capital (` cr) EPS (`)
Source: Company, Angel Research

4QFY2013 291 134 45.9 28 9.7 97 33.4 259 32 11.0 5 7 2 22 7.5 8 38.1 14 4.6 6 22.5

4QFY2012 242 125 51.6 25 10.4 59 24.3 208 33 13.7 4 6 1 25 10.2 6 23.7 19 7.8 6 31.4

% chg (yoy) 20.6 7.4 12.0 65.8 24.4 (3.2) (271)bp 17.8 23.6 18.3 (11.7) 41.7 (28.3)

3QFY2013 223 101 45.4 27 12.2 76 34.1 204 19 8.4 5 6 1 9 4.0 3 31.8 6 2.7 6

% chg (qoq) 30.7 32.3 3.9 28.0 26.9 71.3 262bp 13.3 6.7 48.2 144.9 193.6 122.2

FY2013 1,005 469 46.7 113 11.3 317 31.6 900 105 10.4 18 25 6 68 6.7 23 33.8 45 4.5 6

FY2012 860 459 53.4 82 9.6 229 26.6 770 90 10.5 19 23 5 54 6.2 14 25.4 40 4.6 6 66.6

% chg 16.8 2.2 37.6 38.6 16.8 16.7 (1)bp (5.2) 10.4 11.1 26.4 68.5 12.2

(28.3)

10.1

122.2

74.7

12.2

Revenue better than expected

Relaxo reported mixed set of numbers for 4QFY2013. The revenue for the quarter grew considerably by 20.6% yoy and stood at `291cr, higher than our expectation of `275cr.

Exhibit 2: Actual vs. Estimate

Y/E March (` cr) Net sales EBITDA EBITDA margin (%) Reported PAT
Source: Company, Angel Research

4QFY13 291 32 11.0 14

Angel est. 275 32 11.8 19

% diff 5.8 (1.0) (76) (27.7)

Softening of rubber price offset by increase in other expense

On yoy basis, the gross margin improved by 566bp to 45.9% due to the softening in rubber prices. However, the same was offset by increase in the other expense on yoy basis. Other expense as a per cent of net sales increased from 22.8% in 4QFY2012 to 29.0% in 4QFY2013. Hence, the operating margin for the quarter witnessed a contraction of 269bp on yoy basis and came in at 11.0% against out estimate of 11.8%.

May 15, 2012

4QFY2013 Result Update | Relaxo Footwear

Exhibit 3: Revenue grew considerably for the quarter

350
300

Exhibit 4: Lower RM prices offset by Other expense (yoy)

60.0
50.0 40.0

39.5
33.5 25.6 21.8 15.6 10.3 9.2

45 40
35 30

55.6

54.5

54.1

53.7

51.6

48.3

47.3

45.4

45.9

250
( ` cr)
200 150

21.6

(%)

20.6

25 20
15 10

(%)

30.0 20.0 8.5 10.7

100
201 215
50 0

199

204

242

248

242

223

291

5
0

10.0
0.0

7.9

8.6

13.7

11.1

11.0

8.4

11.0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY14

4QFY11

2QFY12

4QFY12

1QFY13

2QFY13

3QFY13

Revenue (LHS)

yoy growth (RHS)

Raw material/ sales

EBITDA margin

Source: Company, Angel Research

Source: Company, Angel Research

Tax for the quarter stood at `8cr (38.1% of PBT), higher than expected. Subsequently, the profit for the quarter declined by 28.3% yoy and stood at `14cr, 27.7% lower than our estimate of `19cr.

Investment rationale
Store expansion to expand reach and strengthen brand image
Relaxo has aggressive retail expansion plans to open 25-30 retail stores every year. In FY2013, the company added 27 retail outlets, which has taken the total retail outlet count to 168 at the year end. We expect that this expansion of retail outlets will help the company in expanding its reach as well as strengthening its brand image and visibility which will eventually result in top-line addition.

Brand revamping to boost growth

Relaxo has roped in three Bollywood stars for the endorsement of its brands Salman Khan to endorse Hawaii, Katrina Kaif to endorse Flite and Akshay Kumar to endorse Sparx. As a part of its aggressive advertisement strategy, the company spent ~`55.1cr on the advertisement in FY2013. In our channel check, where we interacted with various stores, we came to know that with these celebrities endorsing the brands, the demand has risen. We further expect that the company will be able to maintain its market share in the mass segment through Hawaii brand and penetrate further in the lower and upper-middle class segment through existing products and upcoming launches of Flite and Sparx brands.

Capacity expansion in place to cater increasing demand

The company has incurred a capex of `60cr for the construction of a PU (Polyurethane) footwear plant which got commissioned on 18th of January, 2013. With this plant getting operational, the companys total capacity has gone up by ~30,000 pairs per day which was at 3.70 lakh pairs per day. The company is not planning for any capex in near term for capacity expansion. We expect that with the current capacity the company will be able to cater to the growing demand. According to the industry reports, the current Indian footwear market is estimated to be worth US$3.9bn and is growing at a CAGR of 15% and is expected to be worth US$6.9bn by FY2015.

4QFY14

1QFY12

3QFY12

May 15, 2012

4QFY2013 Result Update | Relaxo Footwear

Changing revenue mix to drive profit

With the changing revenue mix, the profitability is expected to improve in the coming years. Sparx has increased its contribution from a mere 4.2% in FY2008 to 26% in FY2012; on the other hand, Flite has maintained its contribution at ~2530%. Hawaii, being a mass brand, adds to the volume, however, Sparx and Flite help in improving the companys profitability. Going forward we expect the mix to further improve. To meet the growing demand and growing fashion-consciousness of the consumers, the company is launching new designs across all brands in regular intervals.

May 15, 2012

4QFY2013 Result Update | Relaxo Footwear

Financial performance
Assumptions
Exhibit 5: Key assumptions
Assumptions Volume Growth Realisation Growth Change in raw material prices (%) Ethyl Vinyl Acetate (EVA) Rubber
Source: Company, Angel Research

FY2014E 10.8 3.0 (3.0) (3.0)

FY2015E 13.0 3.0 4.0 4.0

Exhibit 6: Actual vs. estimate

Y/E March (` cr) Net sales (`cr) EBITDA Margin (%) Adj. PAT
Source: Company, Angel Research

FY2013E 989 10.6 50

FY2013A 1,005 10.4 45

% chng 1.6 (20)bp (10.6)

For FY2013, the company witnessed a revenue growth of 16.8% and stood at `1,005cr, against our estimate of `989cr, on account of healthy demand coupled with price hikes across brands. We expect the companys revenue to grow at a CAGR of 15.5% over FY2013-15E, from `1,005cr in FY2013 to `1,333cr in FY2015E, mainly on the back of growth triggers, which includes 1) capacity expansion plan, 2) store expansion, 3) improved sales mix and 4) brand revamping.

Exhibit 7: Revenue to be driven by volume growth

1,600
1,400 1,200

Exhibit 8: Sales break up Brand-wise

40

33.3

35.9
25.4 16.8

100.0 14.7 80.0

60.0 40.0 20.0 0.0 4.2 18.9 7.5 29.1 15.1 15.3 28.9

14.5 24.3

15.0 26.0

23.9

30

1,000
( ` cr)
800 600

(%)

14.1
1,146

16.3

20

31.9

(%)

1,005

554

686

200 0

860

407

1,333

400

10
0

25.8

26.0

49.2

44.4

40.8

FY2010

FY2011

FY2012

FY2009

FY2013E

FY2015E

FY2014E

35.5

33.0

Revenue (LHS)

Revenue growth (RHS)

FY2008

FY2009
Hawaii Flite

FY2010
Sparx

FY2011
Others*

FY2012

Source: Company, Angel Research

Source: Company, Angel Research

The gross margin for the year improved by 666bp, however, the effect of same could not result in improvement of operating margin. The reason for the same being increased other expense on account of various initiatives taken in sales, marketing and supply chain management. Also, the company spent substantial amount of ~`55cr (~`30cr in FY2012) on advertisement and publicity. Consequently, the operating margin came in at 10.4%, slightly below our estimate of 10.6%. Going ahead, we expect the other expense to normalize, thus aiding the
May 15, 2012

4QFY2013 Result Update | Relaxo Footwear

operating margin to improve by 93bp over FY2013-15E to 11.4% in FY2015E. The profit for FY2013 stood at `45cr (12.2% higher than FY2012), against our estimate of `50cr. On account of improved margin, we expect the net profit to grow at a CAGR of 27.7% over FY2013-15E to `73cr in FY2015E.

Exhibit 9: Margin to rebound with decreasing RM price

160
140 13.8 10.1 9.6 10.5 10.4 10.9 11.4

Exhibit 10: Profit to grow at a CAGR of 27.7% (FY2013-15E)

80

16
14

70
60 50

160.2

200 150 48.7 12.2 22.9 100 32.7 50

120
100

12
10

( ` Cr)

(%)

( ` cr)

80 60 40

8 6 4

40
30 20

(%)

33.2

105

41

76

90

66

20
0

152

125

2
0

10
0

-28.8

0
-50

FY2009

FY2010

FY2011

FY2012E

FY2013E

FY2015E

FY2014E

EBITDA (LHS)

EBITDA margin (RHS)

PAT (LHS)

PAT growth (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Outlook and valuation

With the growth triggers in place which includes 1) capacity expansion plan, 2) store expansion, 3) improved sales mix and 4) brand revamping 5) continuous product development we remain positive on the companys future. We expect Relaxo to post a revenue CAGR of 15.2% over FY2013-15E to `1,333cr with an operating margin of 11.4% in FY2015E. The PAT is expected to grow at a CAGR of 27.7% to `73cr for the same period. The stock has corrected ~25% since the start of this year and at the current market price, it is trading at attractive valuation of 9.9x FY2015E earnings. We maintain our Buy recommendation on the stock with a revised target price of `791, based on a target PE of 13x for FY2015E.

Exhibit 11: One-year forward PE

1000 800

600
(` )
400 200 0
Mar-09

Aug-09

May-08

Nov-10

Dec-12

Apr-11

Oct-08

Sep-11

Feb-12

Jul-12

FY2015E

FY2013E

FY2014E

FY2009

FY2010

FY2012

FY2011

Price (`)

4x

8x

12x

16x

Source: Company, Angel Research

May-13

Jan-10

Jun-10

May 15, 2012

4QFY2013 Result Update | Relaxo Footwear

Exhibit 12: Comparative analysis

Company Relaxo footwear Bata India* Year end FY2014E FY2015E CY2013E CY2014E Mcap (` cr) 727 727 5,241 5,241 Sales (` cr) 1,146 1,333 2,167 2,534 OPM (%) 10.9 11.4 15.5 16.2 PAT (` cr) 55 73 205 248 EPS (`) 45.9 60.9 33.3 40.4 RoE (%) 23.0 24.6 25.4 24.9 P/E (x) 13.2 9.9 22.4 18.6 P/BV (x) 2.8 2.2 6.7 5.5 EV/EBITDA (x) 7.3 5.9 15.0 12.3 EV/Sales (x) 0.8 0.7 2.3 2.0

Source: Company, Angel Research, *Bloomberg

Risks
Rise in raw material prices and depreciating rupee
The prices of key raw materials EVA and rubber had reached their peak in the last financial year to ~`149/kg and ~`243/kg respectively, which impacted the operating margin. However, the rubber price has started declining, with the current price for rubber at ~`183/kg. Any rise in the price can put margins under pressure. Also, Relaxo imports its entire EVA requirement, so any further depreciation in the rupee can pose a risk to the operating margin and thereby impact the profitability of the company.

Exhibit 13: Rubber price trend

270 250

Exhibit 14: Depreciating rupee a concern for EVA cost

57 56
USD/INR)

258

230
( ` /Kg)
210 190 183

55 54 53 52 51

170
150

Dec-12

Jun-12

Aug-12

Jan-13

Mar-13

Oct-12

Nov-12

May-12

Sep-12

Feb-13

Apr-13

Jul-12

Dec-11

Aug-11

Aug-12

Dec-12

Feb-12

Source: Company, Angel Research

Feb-13

Source: Company, Angel Research

Competition from both branded and unorganised sector

Relaxo competes with both branded as well as the unorgansied market. Hawaii, the mass product faces stiff competition from the unorganised market. On the other hand, Sparx faces competition from branded shoes. Though the company has competitively priced its products, however, any price cut by competitors can put pressure on Relaxos sales and margin.

The company
Relaxo is a key player in the retail footwear industry, with a strong foothold in the slippers market and a strong distribution channel of 700 distributors and more than 46,000 retailers. The company presently has 168 company-owned outlets across India, with a concentrated presence in Delhi, Rajasthan, Gujarat, Haryana, Punjab, Uttar Pradesh and Uttarakhand. It has nine manufacturing plants, seven in Bahadurgarh (Haryana) and one each in Bhiwadi (Rajasthan) and Haridwar (Uttaranchal). Currently, the company sells its products under three major brands Hawaii, Flite and Sparx.
May 15, 2012

May-13

Jun-11

Apr-11

Apr-12

Jun-12

Oct-11

Oct-12

Apr-13

4QFY2013 Result Update | Relaxo Footwear

Profit & Loss Statement (Standalone)

Y/E March (` cr)
Total operating income % chg Net Raw Materials % chg Other Mfg costs % chg Personnel % chg Other % chg Total Expenditure EBITDA % chg (% of Net Sales) Depreciation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of sales) Recurring PBT % chg Extraordinary Expense/(Inc.) PBT (reported) Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg Dividend Retained Earning FY2011 686 23.9 375 29.4 43 31.8 74 34.5 127 27.6 620 66 (13.2) 9.6 21 45 (25.5) 6.6 16 6 0.9 30 (40.5) 0.0 36 9 24.7 27 27 (28.8) 3.9 22.4 22.4 (28.8) 2 25 FY2012 860 25.4 459 22.3 55 26.8 82 10.6 174 37.5 770 90 35.9 10.5 23 67 47.8 7.8 19 5 0.6 48 63.0 0.0 54 14 25.4 40 40 48.7 4.6 33.3 33.3 48.7 2 38 FY2013 1,005 16.8 469 2.2 64 17.5 113 37.6 253 45.3 900 105 16.7 10.4 25 79 18.8 7.9 18 6 0.6 62 28.1 0.0 68 23 33.8 45 45 12.2 4.5 37.3 37.3 12.2 6 39 FY2014E 1,146 14.1 544 15.8 73 14.1 129 14.1 275 8.8 1021 125 19.1 10.9 29 96 21.2 8.4 19 6 0.6 77 24.4 0.0 83 28 33.8 55 55 22.9 4.8 45.9 45.9 22.9 6 49 FY2015E 1,333 16.3 623 14.7 85 16.3 150 16.3 323 17.3 1182 152 21.3 11.4 32 120 24.7 9.0 17 7 0.6 103 34.0 0.0 110 37 33.8 73 73 32.7 5.5 60.9 60.9 32.7 6 67

May 15, 2012

4QFY2013 Result Update | Relaxo Footwear

Balance Sheet (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves& Surplus Shareholders Funds Total Loans Other Long Term Liabilities Long Term Provisions Deferred Tax (Net) Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Lease adjustment Goodwill Investments Long Term Loans and adv. Other Non-current asset Current Assets Cash Loans & Advances Inventory Debtors Other current assets Current liabilities Net Current Assets Misc. Exp. not written off Total Assets 353 84 268 1 0 0 0 11 0 158 2 16 117 23 1 123 35 0 316 379 108 272 21 0 0 0 12 1 169 1 15 128 23 2 131 38 0 344 464 133 330 20 0 0 0 15 1 240 3 39 159 36 3 154 87 0 452 510 162 348 20 0 0 0 15 1 284 9 44 193 35 3 176 108 0 491 561 193 367 20 0 0 0 15 1 336 8 52 228 44 4 204 132 0 535 6 129 135 156 0 2 22 316 6 166 172 146 0 3 22 344 6 208 214 205 6 3 24 452 6 257 263 195 6 3 24 491 6 325 331 171 6 3 24 535 FY2011 FY2012 FY2013 FY2014E FY2015E

May 15, 2012

4QFY2013 Result Update | Relaxo Footwear

Cash Flow (Standalone)

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Direct taxes paid Others Cash Flow from Operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments (Inc.)/Dec. in LT loans & adv. Others Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Closing Cash balances FY2011 36 21 13 (9) (17) 44 (62) 0 11 (12) (63) 0 10 (2) 13 20 1 1 2 FY2012 54 23 (4) (14) 14 73 (46) 0 1 (2) (47) 0 (11) (2) (14) (27) (1) 2 1 FY2013E 68 25 (46) (23) (6) 18 (83) 0 3 11 (69) 0 59 (6) 0 53 2 1 3 FY2014E 83 29 (16) (28) (6) 62 (46) 0 0 7 (40) 0 (10) (6) 0 (17) 6 3 9 FY2015E 110 32 (25) (37) (7) 73 (51) 0 0 8 (43) 0 (23) (6) 0 (30) (0) 9 8

May 15, 2012

10

4QFY2013 Result Update | Relaxo Footwear

Standalone Key Ratios

Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover Inventory / Sales (days) Receivables (days) Payables (days) WC (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 1.1 2.3 2.9 0.8 1.6 3.6 0.9 1.9 4.5 0.7 1.5 4.9 0.5 1.1 7.0 2.1 49 12 57 21 2.4 52 10 60 14 2.4 52 11 58 21 2.4 56 11 63 28 2.5 58 12 63 29 14.3 14.5 22.0 19.5 20.8 26.0 17.6 18.5 23.2 19.6 20.8 23.0 22.5 23.7 24.6 6.6 0.8 2.2 10.9 7.5 1.2 15.0 7.8 0.7 2.7 15.5 9.6 1.0 21.4 7.9 0.7 2.3 12.3 5.7 0.9 18.1 8.4 0.7 2.5 13.8 6.6 0.8 19.7 9.0 0.7 2.6 15.7 6.6 0.6 21.1 22.4 22.4 39.9 1.5 112.2 33.3 33.3 52.5 1.5 143.7 37.3 37.3 58.6 5.0 178.7 45.9 45.9 69.8 5.0 219.6 60.9 60.9 87.2 5.0 275.4 27.0 15.2 5.4 0.2 1.3 13.3 2.8 18.2 11.5 4.2 0.2 1.0 9.7 2.5 16.2 10.3 3.4 0.8 0.9 8.8 2.1 13.2 8.7 2.8 0.8 0.8 7.3 1.9 9.9 6.9 2.2 0.8 0.7 5.9 1.7 FY2011 FY2012 FY2013E FY2014E FY2015E

May 15, 2012

11

4QFY2013 Result Update | Relaxo Footwear

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report . Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Relaxo Footwear No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

May 15, 2012

12